I am delighted for a recent client who I successfully renegotiated a significant increase to the Termination Payments originally offered to them in their Settlement Agreement. If you have recently been offered or received a Settlement Agreement from your employer, how should you respond? Read on to learn more.
My Client’s Story
I met with my client for a Settlement Agreement appointment in January 2023. They had returned to work after Christmas and they had been offered a Settlement Agreement from their employer. They had not expected this to happen and they did not realise there had been any issues with their employment.
It transpired that their employer considered there were issues with their performance and it was communicated to my client that if they did not accept the Settlement Agreement, a Performance Improvement Plan (PIP) would commence which could, ultimately, result in their dismissal.
I reviewed the Termination Payments offered to my client. In essence, they were receiving the equivalent of a couple of months’ salary, plus their contractual entitlements to notice. In return, they were to leave their employment and waive their employment law rights. It was my view that the employer’s offer was too low. This was due to there being no formal concerns raised with my client’s performance and the PIP was yet to start. I considered it could take their employer 3-6 months to attempt to terminate their employment for poor performance.
My client instructed me to renegotiate their Settlement Agreement. I was delighted to obtain a significant increase in their Termination Payments.
What Is A Settlement Agreement?
Settlement Agreements are legally binding contracts which can be used to resolve ongoing workplace disputes, or they can be used to end an employment relationship. They are voluntary and generally include some form of payment to the employee.
Settlement Agreements are often lengthy and you may find that there are a number of clauses included within it. Such clauses could relate to your termination date, pension entitlements, waiver of claims by the employee, return of property etc. There are also specific conditions which must be included within Settlement Agreements to ensure they are legally compliant. One legal requirement is that the employee receives advice, before signing, from a relevant independent adviser, such as a solicitor.
In essence, once a valid Settlement Agreement has been signed by both parties, the employee is unable to pursue or make any Employment Tribunal claims.
How Can Lincs Law Help You?
Generally when you receive a Settlement Agreement, you will have a contribution towards your legal fees which is payable by your employer. Therefore, you may find obtaining legal advice is free to you.
When you receive a Settlement Agreement, we will ask you to make an appointment with us (currently telephone or a video conference) so that we can take your instructions. During our appointment we will discuss the following:-
- We will take a detailed background to the situation.
- We will advise you on any potential claims you may have.
- If we identify a potential claim, we will estimate the value of that claim.
- If a claim is identified, we cross reference the value to your Termination Payment and advise you on the amount you are being offered.
- We go through the specific clauses of the Settlement Agreement and advise you on their meaning.
Negotiating Settlement Agreements
It is common for some form of payment to be made to the employee as part of the Settlement Agreement. It is also common for the party who has instigated settlement discussions to provide a draft settlement agreement and naturally, that party may draft the terms to be more favourable to them. It is therefore important that you negotiate on any key clauses or ask for certain clauses to be removed or modified, if you are unhappy with them before signing the Settlement Agreement.
In addition, it is crucial to identify any potential claims available to you as you need to ensure the Termination Payment which is being offered adequately compensates you for waiving your Employment Law rights. We frequently renegotiate Termination Payments on behalf of our clients.
How To Get In Touch
If you require any Employment Law advice or if you have received a Settlement Agreement, please do not hesitate to give us a call on 01522 440512 or email ContactUs@lincslaw.com for an initial free consultation. If you would like to know more about Settlement Agreements, please visit our website at https://lincslaw.co.uk/services/settlement-agreement/ for more information.
Lucy Stones
Specialist Employment Solicitor
Lincs Law Employment Solicitors
Tags: compensation payment Employment Tribunal Claims lucy stones renegotiate settlement payments settlement agreement
